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China’s trans-Myanmar pipeline to start pumping oil in May

A general view of Shwe Gas terminal in Kyaukphyu, Rakhine state, western Myanmar. Photo: Nyunt Win/EPA

A pipeline pumping crude oil from Myanmar ’s Rakhine coastline into Yunnan Province in China will finally be operational in May after several delays, according to the Thura Swiss market research company based in Yangon.

An official from investors Southeast Asia Crude Oil Pipeline (SEAOP) was cited in local and Chinese media reports this week saying that the pipeline is ready for operation, and that commencement is awaiting “instructions from higher ups.”

The SEAOP comprises: China National Petroleum Corporation (CNPC); Myanmar Oil and Gas Enterprise (MOGE); DAEWOO and KOGAS of South Korea; and OCEBV and GAIL from India.

“A soft opening was launched for the project in early 2015, but the project has faced numerous delays due to negotiations between the Myanmar and China governments,” reported Thura Swiss. “The oil pipeline runs parallel with the natural gas pipeline which began operating in 2014. However, like many large -scale China -backed projects in Myanmar, the oil pipeline has been met with protests from local communities over the apparent lack of transparency regarding the project.”

Meanwhile, it was also reported this week that Statoil from Norway and the United States’ ConocoPhillips are planning to invest more than US$300 million to explore and produce oil and gas off the Rakhine coastline.

Again citing local media, Thura Swiss reported that the two firms had signed a production sharing contract, or PSC, for deep water block AD -10 in the Bay of Bengal. The reports quoted an unnamed official from the Ministry of Electricity and Energy.